Question 1

Under the LCM rule,a business must report inventory at the current replacement cost.

Accepted Answer

A) True 
 B)False

Question 2

Net sales minus estimated gross profit yields the estimated:

Accepted Answer

A) ending inventory. 
B) beginning inventory. 
C) gross profit. 
D) cost of goods sold. 
A) ending inventory. 
B) beginning inventory. 
C) gross profit. 
D) cost of goods sold.

Question 3

Net sales times the historical gross profit percentage yields the estimated:

Accepted Answer

A) ending inventory. 
B) beginning inventory. 
C) gross profit. 
D) cost of goods sold. 
A) ending inventory. 
B) beginning inventory. 
C) gross profit. 
D) cost of goods sold.

Question 4

A material amount of value is one large enough to cause someone to change a decision that has been made.

Accepted Answer

A) True 
 B)False

Question 5

In order to pay the least income tax possible in periods of rising inventory costs,the company should use which of the following inventory costing methods?

Accepted Answer

A) FIFO 
B) LIFO 
C) Average cost 
D) Specific identification 
A) FIFO 
B) LIFO 
C) Average cost 
D) Specific identification

Question 6

An example of full disclosure would be a footnote to the financial statements indicating what method was used to value inventory.

Accepted Answer

A) True 
 B)False

Question 7

Under the conservatism principle,liabilities and expenses would be overstated,rather than understated.

Accepted Answer

A) True 
 B)False

Question 8

Liberty,Inc.has the following list of inventory:
 
Under specific-identification,what is Liberty's cost of goods sold if ICF and CRD were not sold during the current period?

Accepted Answer

A) $34,224 
B) $40,601 
C) $40,953 
D) $51,369 
A) $34,224 
B) $40,601 
C) $40,953 
D) $51,369

Question 9

The various inventory costing methods will still produce the same cost of goods sold value.

Accepted Answer

A) True 
 B)False

Question 10

The first step in using the gross profit method to estimate ending inventory is to:

Accepted Answer

A) calculate the cost of goods available for sale. 
B) estimate the ending inventory. 
C) estimate the beginning inventory. 
D) estimate the cost of goods sold. 
A) calculate the cost of goods available for sale. 
B) estimate the ending inventory. 
C) estimate the beginning inventory. 
D) estimate the cost of goods sold.

Question 11

A method of valuing inventory based on the average of units is called the:

Accepted Answer

A) LIFO method. 
B) average cost method. 
C) specific cost method. 
D) FIFO method. 
A) LIFO method. 
B) average cost method. 
C) specific cost method. 
D) FIFO method.

Question 12

The inventory turnover rate is computed by:

Accepted Answer

A) dividing average inventory by cost of goods sold. 
B) dividing cost of goods sold by average inventory. 
C) dividing ending inventory by cost of goods sold. 
D) dividing ending inventory by beginning inventory. 
A) dividing average inventory by cost of goods sold. 
B) dividing cost of goods sold by average inventory. 
C) dividing ending inventory by cost of goods sold. 
D) dividing ending inventory by beginning inventory.

Under the LCM rule,a business must report inventory at the current replacement cost.

Net sales minus estimated gross profit yields the estimated:

Net sales times the historical gross profit percentage yields the estimated:

A material amount of value is one large enough to cause someone to change a decision that has been made.

In order to pay the least income tax possible in periods of rising inventory costs,the company should use which of the following inventory costing methods?

An example of full disclosure would be a footnote to the financial statements indicating what method was used to value inventory.

Under the conservatism principle,liabilities and expenses would be overstated,rather than understated.

Liberty,Inc.has the following list of inventory: Under specific-identification,what is Liberty's cost of goods sold if ICF and CRD were not sold during the current period?

The various inventory costing methods will still produce the same cost of goods sold value.

The first step in using the gross profit method to estimate ending inventory is to:

A method of valuing inventory based on the average of units is called the:

The inventory turnover rate is computed by:

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

The Challenges of Accounting: Standards, internal Control, audits, fraud, and Ethics

Cash and Receivables

Long-Term and Other Assets

Current Liabilities and Long-Term Debt

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Financial Statement Analysis

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Exam 5: Inventory

Under the LCM rule,a business must report inventory at the current replacement cost.

Net sales minus estimated gross profit yields the estimated:

Net sales times the historical gross profit percentage yields the estimated:

A material amount of value is one large enough to cause someone to change a decision that has been made.

In order to pay the least income tax possible in periods of rising inventory costs,the company should use which of the following inventory costing methods?

An example of full disclosure would be a footnote to the financial statements indicating what method was used to value inventory.

Under the conservatism principle,liabilities and expenses would be overstated,rather than understated.

Liberty,Inc.has the following list of inventory: Under specific-identification,what is Liberty's cost of goods sold if ICF and CRD were not sold during the current period?

The various inventory costing methods will still produce the same cost of goods sold value.

The first step in using the gross profit method to estimate ending inventory is to:

A method of valuing inventory based on the average of units is called the:

The inventory turnover rate is computed by:

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

The Challenges of Accounting: Standards, internal Control, audits, fraud, and Ethics

Cash and Receivables

Long-Term and Other Assets

Current Liabilities and Long-Term Debt

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Financial Statement Analysis

Filters